Markets behaved as it was suggested in our technical view of last week. The previous weeks rise was only a pull-back rally and NIFTY found strong resistance around 6150. We had suggested that NIFTY has to close above 6166 for any sustainable move on the upside.
During the highly volatile week MARKETS continued to drift on the lower side until the last hour of trades during which the down move was arrested exactly around supports of 5924 as NIFTY made a low of 5937 and then closed back above psychological level 6000 at 6017 largely thanks to the rally of ICICI BANK.
One thing is quite noticeable that is the strength of RELIANCE closed at 1096 on Friday if on the back of good results RELIANCE continues its latest upward journey and somehow closes above the major supply level of 1160 it will be a great moral booster for our MARKETS.
As presented with this analysis a few SECTORIAL INDICES have closed sharply lower during the last week and the fall in them during last few weeks have been quite sharp suggesting that any upside move in them would be corrective only and should be used to exit longs from stocks of these INDICES BSE METAL, BSE PSU, BSE IT AND BSE REALITY.
For the coming week the trend decider level for NIFTY/SENSEX will be A CLOSE ABOVE 6166/20450 respectively.Our comments about the present scenario of the great Bull Run started in October 2008:
As mentioned in our earlier report on 11/09/2010, late October and November months have few time zones which are crucial in relevance of our anticipation of a probable TOP which we presumed as per some FIBONACCI NUMBERS present in this rally.
One important observation is that TOPPING is a process which can get spread over a few weeks to a few months time and many times the primary INDICES keep making new highs for some time even though a TOP has already been in place if one can compare SECTOR SPECIFIC INDICES.
This is true for all major turning points after big bull-runs of larger bearish trends too even in October 2008 SENSEX and NIFTY were in firm bear grip but some SECTORS like OIL AND GAS,FMCG, AUTO AND PSU did actually made lows in October 2008 while SECTORS like IT and BANKING kept sliding down and they made their final bottoms in march 2009.
This time around we are seeing tops being perhaps made in SECTORS LIKE METAL, REALITY and PSU earlier than NIFTY/SENSEX and some other SECTORS like BANKING and HEALTHCARE. There are a few charts of these INDICES.
BSE IT
This chart is of BSE IT presented last week with suggested comments. Friday close seems below both supports, which were shown earlier so it will be decisive 2-3 days for IT Stocks.
BSE METAL
As suggested last week, METAL INDEX cracked down heavily during the week. Now Further Targets set around 16000.
BSE PSU
A decisive break below Neckline of Top HEAD & SHOULDER in BSE-PSU INDEX which is almost of 500 points from 10200 which set the Target of 9800
BSE REALITY
One of the weakest SECTORIAL INDEX BSE REALITY found some support on Friday at TRENDLINE & 38.2% RETRACEMENT LEVEL but the fall from 4000+ to 3600 seems very weak.
The crux of the analysis is that there will be some strong rally in prime indices like if nifty closes above 5166 and if SENSEX closes above 20450 but the up move in these weaker SECTOR INDICES should be considered as selling opportunity only.
On the other hand any close in NIFTY/SENSEX BELOW 5920/19750 will lead to further downside.
A few Stocks to trade for this week
ICICI BANK (CMP 1163)
View: Buy
Stop loss: 1149
Targets: 1198/1228
BALKRISHNA INDUSTRIES (CMP 767)
View: Buy
Stop loss: 749 on a closing basis
Targets: 804/854
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